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Car insurance is an all-important safety net to have on the road, and the safest of drivers are usually considered the most desirable policyholders by insurance companies. Safe driving and no claims discounts are one of the most common offerings on an insurance policy, as not having to go through the claims process saves time and effort down the line for insurers. Here’s how you can capitalize on a no-claim bonus.

Calculating No-Claims Discounts

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Auto insurance policies will offer no claims discount/no claim bonus to drivers and their family members with no record of having been involved in a car accident within a certain time period. A no-claims bonus is usually only offered under comprehensive car insurance policies. The discount will usually increase with each passing year without a claim until it maxes out. Your insurer will look at your claims history, your driving record, and possibly your rating from a previous car insurance provider to calculate that free discount.

The best thing about a no-claims bonus is the reduced cost of insurance premiums. Most insurance providers will give that discount over in different ways that will be laid out in a plan’s terms and conditions. Some insurers might limit how long you can apply for car insurance discounts. Others may set a minimum premium amount. Safe drivers should keep in mind that most insurance companies will not carry over if you purchase a new car. However, if you change policies, some insurers will let those discounts carry over to the new plan.

What if I make a claim?

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While obtaining that auto insurance discount is the result of a strong driving record, you may fear what could happen to that discount amount in the event that you need to submit a car insurance claim. If you get involved in a car accident or have any traffic violations that could lead to a claim, your insurer will likely re-evaluate the bonus. If the accident is your fault, you’ll either see that discount be removed or reduced. If your auto insurer determines you weren’t at fault, they will more than likely allow the no-claims bonus to continue uninterrupted.

If you are shopping for a new vehicle, you may look into a dealership or dealers auto auction for the car for you. This could end up causing a discount to disappear depending on the circumstances that have led to a newer vehicle. Some insurance companies will take a deeper look at the details. Others may keep a no-claims bonus or discount in place, but could instead pass the increase on to the monthly premiums of your insurance policy. If they’re not able to recover the costs of your claim from the other driver, that premium increase can happen.

Additional Discounts

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While a no-claims bonus will shave a certain amount off your payment plan, there are other discounts that a driver can cash in on for the long term. For example, purchasing a bundle of your insurance policies as a homeowner could save you by keeping your policy documents under the same carrier. This could account for even a renter’s policy or some health insurance plans. This can also fall under the umbrella of a loyalty discount for the amount of time you’ve been with an insurer.

A no-claims bonus may not be accessible to a new driver based on their lack of a driving record. However, student discounts are made available by some auto insurance providers. You can even capitalize on things as simple as going paperless with your billing statements, or an online quote discount to spare you in the long run. Be sure to do your shopping to make sure beyond discounts that the policy is the right one for you.